Southwestern Ontario Development Fund Business Expansion Grants and Loans

The Southwestern Ontario Development Fund (SWODF) is a business expansion funding program that incentivizes companies to invest in new facilities and equipment. It attracts large-scale projects that have a significant impact on business productivity and create new employment opportunities within the company. Through the program, successful applicants will receive grants or a combination of grants and repayable funding (government loans) to offset project costs.

SWODF business investment funding supports most projects up to 10-15% of eligible costs to a maximum $1.5M in Ontario government grants.

To qualify for SWODF funding, Southwestern Ontario businesses must provide a minimum investment of $500,000, have at least 10 employees at the time of application, and commit to creating at least 10 jobs during the project. Other eligibility criteria apply; continue reading to learn if this business investment funding is suitable for your expansion plans.

What is the Southwestern Ontario Development Fund?

The Southwestern Ontario Development Fund (SWODF) is one of the most popular Ontario government funding programs available to support large-scale business investments. Through the program, companies can receive grants and loans to minimize the impact of expansion on company cash flows. By providing additional capital to support projects, manufacturers and other targeted applicants can grow faster and respond to opportunities more effectively.

Most applicants applying for SWODF funding will receive up to 10-15% of project expenses to a maximum of $1.5 million. Some applicants may qualify for additional repayable funding.

The SWODF funding program typically looks at the overall project size a business proposes to ascertain how much funding can be awarded. Smaller projects with less than $10 million in eligible project expenses are generally only provided with the non-repayable grant contribution, while larger projects surpassing $10 million in eligible expenses may also qualify for the grant plus an additional plus an additional no-interest loan of up to $3.5 million. To learn more about how the program works, please read Mentor Works’ SWODF overview blog.

Business Eligibility for the Southwestern Ontario Development Fund

To qualify for the Southwestern Ontario Development Fund, applicants must:

  • Provide a minimum project investment of $500,000;
  • Be located within Southwestern Ontario (see below);
  • Be in a priority business sector (see below);
  • Be incorporated and have at least three years of financial statements;
  • Maintain at least 10 employees at the time of application; and
  • Create at least 10 new jobs upon project completion.

What is SWODF’s Definition of Southwestern Ontario?

Applicant companies must ensure their business operates in Southwestern Ontario to qualify for SWODF. Eligible regions include:

  • Brant;
  • Bruce;
  • Chatham-Kent;
  • Dufferin;
  • Elgin;
  • Essex;

  • Grey;
  • Haldimand;
  • Huron;
  • Lambton;
  • Middlesex;
  • Niagara;

  • Norfolk;
  • Oxford;
  • Perth;
  • Simcoe;
  • Waterloo; and
  • Wellington.

Please Note: Businesses operating in Eastern Ontario can access similar funding support through the Eastern Ontario Development Fund (EODF).

What is SWODF’s Definition of a Priority Business Sector?

To qualify for SWODF funding, businesses must operate in a priority sector:

  • Priority sectors are established in high-priority industries, including advanced manufacturing, information and communications technology (ICT), primary resources processing, life sciences, tourism, and cultural industries.
  • Ineligible sectors include personal and professional services, restaurants, construction, consulting, retail, golf courses, primary resources production, and recycling programs.

Project Eligibility: SWODF Business Expansion Funding

There are three types of projects that commonly receive Southwestern Ontario Development Fund grants and loans. They include:

Ineligible Projects

SWODF is meant to provide cost-sharing support for business expansion activities, and therefore will not provide funding for:

  • Relocation of business operations to other parts of Ontario or elsewhere;
  • Recurring or ongoing operations such as maintenance or capital replacement;
  • Acquisitions and buyouts; and
  • Refinancing of existing business operations.

Expense Eligibility: SWODF Business Investment Funding

The Southwestern Ontario Development Fund (SWODF) only accepts project costs that are one-time expenses essential to project completion. These may include:

  • New machinery or equipment;
  • Facility modifications, upgrades, or retrofits;
  • Materials needed to configure or test production processes upgraded by the project;
  • Internal labour fees;
  • Specialized third-party consultants required to plan/execute the project;
  • Training employees (either internally or through a third-party trainer); and
  • Project permits, fees, and similar project-related expenses.

Project Expenses Ineligible for SWODF Ontario Government Funding

Some project expenses cannot be claimed through the SWODF program. These include, but are not limited to:

  • Any recurring or ongoing operational costs, including labour;
  • Overhead costs;
  • Lease costs;
  • Working capital costs;
  • Marketing, sales, and distribution fees;
  • Debt servicing costs;
  • Vehicles and any off-site equipment;
  • Replacement of capital equipment; and
  • Purchase of land or buildings, or construction of a new building.

How to Apply for SWODF Ontario Government Funding

SWODF funding has an open call for applications; this means that companies can apply for funding year-round. It’s often best to submit applications a minimum of 4-6 months ahead of the project’s anticipated start date to ensure adequate time for application review. Upon application approval, applicants can begin incurring funding-eligible expenses.

To discuss your project’s eligibility for SWODF funding and learn how to optimize the application process, please contact Mentor Works.

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Written by

Jeff Shepherd holds an Honours Bachelor of Business Administration at the University of Guelph. He is passionate about Canadian business, economics, and politics. As Marketing Coordinator for Mentor Works, Jeff educates business leaders about proactive funding strategies.

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